Stocks are closing out a down week on a negative note after the Trump administration announced export restrictions designed to cut off Huawei Technologies from overseas suppliers. The move against the Chinese telecom-equipment maker threatens to ignite a new round of U.S.-China tensions, with the Editor-in-chief of a state-run paper tweeting that China could respond by restricting or investigating U.S. companies "such as Qualcomm, Cisco and Apple," or suspending the purchase of Boeing airplanes.
ECONOMIC EVENTS: In U.S. data, retail sales plummeted another 16.4% in April, and dropped 17.2% excluding autos. The Empire State manufacturing index improved 29.7 points to -48.5 in May following a drop to an historic low of -78.2 in April. Industrial production dropped 11.2% in April, which was not quite as bad as forecast but still the steepest decline on record. Business inventories fell 0.2% in March, as forecast. Consumer sentiment inched up 1.9 points to 73.7 in the preliminary report from the University of Michigan survey, which was a little better than expected.
TOP NEWS: Shares of Applied Materials (AMAT) were rising following last night's fiscal Q2 report from the company until the U.S. announced plans "to protect U.S. national security" by restricting Huawei's ability to use U.S. technology and software to design and manufacture its semiconductors abroad.
That news, which also sent shares of Applied's chipmaking equipment supplier peers KLA-Tencor (KLAC) and Lam Research (LRCX) lower, was a drag on Taiwan's TSMC (TSM) too. The major producer of chips for Huawei's HiSilicon unit announced separately that it intends to build and operate an advanced semiconductor fab in the United States with the mutual understanding and commitment to support from the U.S. federal government and the State of Arizona.
Shares of Sorrento Therapeutics (SRNE) have more than doubled after the company claimed to have discovered an antibody that could shield the human body from the coronavirus and flush it out of a person's system within four days. The company announced that its anti-SARS-CoV-2 antibody, STI-1499, demonstrated 100% inhibition of SARS-CoV-2 virus infection in an in vitro virus infection experiment at a very low antibody concentration. In an interview with Fox News, Dr. Henry Ji, CEO of Sorrento Therapeutics, reportedly said: "We want to emphasize there is a cure. There is a solution that works 100 percent."
Meanwhile, the FDA is alerting the public to early data that suggest potential inaccurate results from using the Abbott (ABT) ID NOW point-of-care test to diagnose COVID-19. In response, the company said it is "seeing studies being conducted to understand the role of ID NOW in ways that it was not designed to be used. In particular, the NYU study results are not consistent with other studies." Abbott intends to change the directions for using its ID Now COVID-19 test for a second time, Christopher Weaver of The Wall Street Journal noted following the FDA alert.
Facebook (FB) announced that visual expression company GIPHY is joining its Instagram team. "GIPHY makes everyday conversations more entertaining, and so we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves," Facebook stated. While the company did not announce terms of the deal, Axios reported that it has learned "from multiple sources" that the total deal value is around $400M and that Giphy is expected to retain its own branding.
MAJOR MOVERS: Among the noteworthy gainers was Office Depot (ODP), which announced a restructuring plan that would involve 13,100 job cuts by 2023. Also higher were Aurora Cannabis (ACB) and Dillard's (DDS), which gained a respective 68% and 8% after reporting quarterly results.
Among the notable losers was Canada Goose (GOOS), which slid 8% in New York trading after BofA analyst Robert Ohmes downgraded the stock to Underperform from Neutral, saying he anticipates significant annual declines in North America and Europe revenues amid restrained international tourism that should persist "at least through year end." Also lower was Co-Diagnostics (CODX), which fell 22% after reporting quarterly results and saying that its COVID-19 test demonstrated "excellent performance."
INDEXES: Near midday, the Dow was down 76.77, or 0.32%, to 23,548.57 , the Nasdaq was down 12.33, or 0.14%, to 8,931.39 , and the S&P 500 was down 6.03, or 0.21%, to 2,846.47 .
Applied Materials
-3.1 (-5.69%)
Lam Research
-17.19 (-6.39%)
TSMC
-2.6 (-4.99%)
KLA Corp.
-7.3 (-4.15%)
Ticker changed to META
+0.42 (+0.20%)
Abbott
-2.055 (-2.24%)
Sorrento Therapeutics
+5.095 (+194.10%)
ODP Corporation
+0.175 (+8.73%)
Aurora Cannabis
+4.64 (+70.20%)
Dillard's
+1.75 (+7.63%)
Canada Goose
-1.49 (-7.21%)
Co-Diagnostics
-4.7 (-21.18%)
Qualcomm
-4.49 (-5.62%)
Apple
-5.13 (-1.66%)
Boeing
-2.95 (-2.41%)
Cisco
+0.14 (+0.32%)